Corporate Influences and Financial Reporting Quality in Pre- and Post-Adoption of the Malaysian Financial Reporting Standards

Azleen Shabrina Mohd Nor*, Nahariah Jaffar, Zarehan Selamat, Salmi Mohd Zahid and Norhazlin Ismail
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Azleen Shabrina Mohd Nor*: Faculty of Management, Multimedia University, Malaysia
Nahariah Jaffar: Faculty of Management, Multimedia University, Malaysia
Salmi Mohd Zahid: Faculty of Management, Multimedia University, Malaysia
Norhazlin Ismail: Faculty of Management, Multimedia University, Malaysia

The Journal of Social Sciences Research, 2018, 52-60 Special Issue: 3

Abstract: In Malaysia, corporate influences on financial information have received a great attention by the stakeholders since it represents board of directors’ accountability. Board of directors communicate the financial information through the corporate financial reports. However, the corporate influences on improving the financial reporting quality have been under investigated, particularly with the adoption of the Malaysian Financial Reporting Standards (MFRSs). This study examines the corporate influences on the financial reporting quality in pre- and post-adoption of the MFRSs. Specific corporate influences indicators examined in this study are board of directors’ independence, board size, frequency of board meeting, financial literacy of board members, board directorship, board change, managerial ownership and directors’ remuneration. Data were collected on 456 companies listed on the Bursa Malaysia. The results indicate that there is no significant difference in the means of financial reporting quality in the pre- and post-adoption periods of the MFRSs. In addition, it was found that only board of directors’ independence has the significant effect on the financial reporting quality in the post-adoption period of the MFRSs. This study contributes to the financial reporting quality literature by means of examining the role of governance mechanism, in the pre- and post-adoption of the MFRS.

Keywords: Financial reporting quality; Corporate influences; Malaysian financial reporting standards; Agency theory. (search for similar items in EconPapers)
Date: 2018
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